Kiwis arriving as of today won't be given the same benefits as those already living and working across the ditch.

Those who do qualify will now be able to apply for citizenship, subject to the Australian immigration system's usual health and security checks.

The agreement will allow qualifying Kiwis to acquire permanent residency in the first instance, and then become eligible for citizenship one year down the line.

Turnbull described it as a "very important issue for our good friends across the Tasman - announcing new pathways to citizenship for New Zealanders who have resided here for five years or more and during that time have earned income in excess of the temporary skills migration threshold."

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New Zealand Prime Minister John Key held talks with his Australian counterpart Malcolm Turnbull on Friday.

Key thanked Turnbull for the leadership his counterpart has shown in paving the way for Kiwis to apply for Australian citizenship, saying there's been advocacy for the plight of New Zealanders in Australia "for many years".

He added that the steps taken today will help tens of thousands of Kiwis to one day become Australian citizens, saying "they will make great citizens, great Australians. We will both want to claim them."

The second-class status of Kiwis across the ditch has been a thorn in the trans-Tasman relationship since an Australian Government clampdown in 2001 denying them access to welfare and many other entitlements.

Asked about a perceived 'change in heart' over Kiwis seeking citizenship across the Tasman, Turnbull said "Australians and New Zealanders are very close. Our histories are absolutely indelibly entwined. So is our destiny."

Key confirmed he had also raised the plight of New Zealanders deported by Australia under its tough new good character laws.

However, there are no signs following Friday's talks that there will be any movement by Australia on that front, with Turnbull maintaining Australia's stance that "the good character law applies to every country," and that it "was not singling out New Zealand".

More than 300,000 Kiwis are believed to be living across the Tasman on Special Category Visas (SCV), which even stops them from applying for jobs in the Australian Defence Force - including those who have called Australia home since they were babies.

OZ Kiwi, the group lobbying on behalf of New Zealanders in Australia, urged both leaders to address the issue, which has been repeatedly raised by Key with successive Australian prime ministers.

Under the SCV New Zealanders are allowed to work and live in Australia indefinitely and can purchase property.

However, there is no pathway to citizenship under the SCV - regardless of how long Kiwi expats live there or how much they earn.

Even children born to New Zealand parents in Australia are denied the usual rights of citizenship.

The 2001 clampdown was prompted by the legend of the "Bondi bludger" and a perception that Kiwis were exploiting the freedom of travel between New Zealand and Australia in disproportionate numbers.

But official figures suggest the exchange may be more even than popularly believed, with an estimated 1.7 per cent of New Zealand's resident population classed as Australian.

That compares with Australia, where 2.4 per cent of the resident population were born in New Zealand.

New Zealanders who call Australia home also earn more than their Australian counterparts on average - their median income is 27 per cent higher.

They are also more likely to be in work - 65 per cent of resident New Zealanders are in full-time employment, more than the Australian national average.

While there have been some concessions by the Australian government in recent years, OZ Kiwi said many New Zealanders were still excluded from accessing student loans, unemployment benefits, disability benefits and some insurances.

They were also excluded from Australia's National Disability Insurance Scheme, despite paying a levy as part of their taxes, OZ Kiwi said in a statement issued by chairman Tim Gassin.

The group has highlighted the case of seven year old Toby Benesemann, who was born prematurely in Sydney in 2008 and diagnosed with autism.

While his New Zealand born parents must pay the NDIS levy he will not be eligible for support under the national insurance scheme once it is rolled in.

Oz Kiwi were aware of a number of Australian-born children like Toby also unfairly denied support, Gassin said.